Saturday, February 10, 2007

Thoughts & Questions on the Energy Credit


Last year, I posted about my need for insulation (here also). At the time, I estimated I would need about 10 rolls at a total cost of around $300. Well tonight, I was talking to a guy at Lowe's to get a better idea of what I needed (I want to get the energy credit for this year to). R-25 costs about $25/roll and I would probably need about 22 rolls rather then 10, meaning I would need to come up with about $600 to finally get insulation in my attic. Of course that would not get the upper portion of the 3 attics I have in my house, but would get the most important areas on my ceilings.

While I am thinking about the governments energy credit. Does anyone know, if switching to the compact florescent bulbs would be included? I picked up 3 more bulbs while I was there at Lowe's. In fact one was a 2-pack (1st time I had seen a 2-pack) for my ceiling fan. The other was a compact flood light, for my back porch. In addition, I seen the regular compact florescent in a 4-pack (1st time seeing 4-packs to). Next time I buy bulbs, I will be picking up a couple 4-packs at Lowe's. I expect to have most of the lights replaced with these energy savers by the end of the year, and I just wondered if I should save my receipts for the tax man or not.

I know, if I replace the water heater, I can get a credit. But what if I just buy the insulation to wrap my current one in?

Other Ways to Get the credit

  • Replace old windows with double or triple pane windows

  • Replacing Exterior doors with doors rated as energy efficient

  • Metal roofs (meeting applicable Energy Star requirements) - I have thought I would like to go this route instead of my shingles, I just never thought it was more energy efficient.





Residential energy property credit

A new tax credit of up to $500 is available to individuals for non business energy property, such as residential exterior doors and windows, insulation, heat pumps, furnaces, central air conditioners and water heaters placed in service in 2006 and 2007. The non business energy property must be installed in or on a dwelling unit in the United States that is owned and used by the taxpayer as the taxpayer's principal residence and originally placed in service by the taxpayer. There must be a reasonable expectation that the qualified energy efficiency improvements (exterior doors and windows, insulation, and certain metal roofs) will remain in use for at least 5 years.

The residential energy property credit is limited to a maximum of $500 for all tax years and no more than $200 of the credit can be based on expenditures for windows. The credit is equal to: (1) the residential energy property expenditures plus (2) 10 percent of the cost of qualified energy efficiency improvements. Eligible improvements include: insulation materials; exterior windows, including skylights; exterior doors; metal roofs with special pigmented coatings; electric heat pump water heaters; electric and geothermal heat pumps; central air conditioners; natural gas, propane, or oil water heaters or furnaces; hot water boilers; and advanced main air circulating fans.

There is also a nonrefundable tax credit available to help individual taxpayers pay for residential alternative energy equipment. The residential alternative energy credit is 30 percent of a qualified solar electric property expenditure, qualified solar water heating property expenditure, or qualified fuel cell property expenditure made by the taxpayer during the year. The maximum credit for any tax year is $2,000 for each category of solar equipment, and $500 for each half kilowatt of capacity of fuel cell property installed during the year. Eligible equipment must be placed in service during 2006 through 2008.

- http://www.finance.cch.com/text/c60s15d780.asp


Sounds like I would be able to get most of my money back for the insulation, but if I do anything else, it would be just out my own pocket, with no rebate. I mean, If I spend $1000 to get a Pella "blind between the glass" picture window, I would be able to claim a credit of $200 on that window, but then I would only be able to claim $300 on the insulation. Am I reading that all right? Am I missing anything?
No matter what, all these items would help save me money on my home heating/cooling bills.

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